Tag Archives: Obama Economic Policy

Last week my friends at SchumpetersCentury emailed me an post by Jonathan Ortmans — a Kauffman Fellow — arguing that Obama gets entrepreneurship. Then my father sent me an editorial from the Investor’s Business Daily exposing how our policy makers are destroying America’s job creation engine — entrepreneurs. I know which is closer to the truth.

Even more sick is that today’s WSJ highlights Biden’s saying that the administration ‘misread how bad the economy was’ — what this really means is that their policies are not working and they want another stimulus plan. Don’t let it happen. From the must read IBD Op-Ed – Stop the Madness That’s Killing Jobs:

But 18 months into this downturn, we’re still losing jobs — with 2.7 million gone in the private sector just since January, when the Democrats took full control of the government.

Worse, the June jobs data mark a milestone of sorts: Our unemployment rate equals that of the no-growth Eurozone nations.

Why is this job decline happening? The private sector — the real engine of economic and job growth — won’t hire because it’s scared of what it sees coming out of Washington.

On the horizon, as far as the eye can see, are higher taxes, uncontrolled spending and layers upon layers of new regulations.

Who would hire new workers faced with that?

Also, the federal government is meddling in the private sector as never before — in essence, nationalizing two of the three major carmakers with $200 billion in subsidies and capital infusions, turning our banking system into a fourth branch of government through the $700 billion TARP program, spending $200 billion to take over Fannie Mae and Freddie Mac and put them back in the business of lending to people who can’t pay their loans — which is how we got into trouble in the first place.

And that’s only what’s been done in the last half year or so. What really scares private businesses is what’s in the pipeline.

Please, read the whole editorial and then call your elected reps: tell them to stop the madness!

Forbes columnist Sramana Mitra has a new book out on bootstrapping. She interviews 13 entrepreneurs from Silicon Valley. The review at the Sustainable Work Blog offers a nice snippet from Mitra’s opening (especially in light of the $30.4 billion that Obama is giving to GM today):

“So, what next? Where to from here? From my perspective it is clear that small business must be a top policy priority. There are approximately 5 million small businesses in the United Sates with fewer than 20 employees. Another 20 million mom-and-pops endeavor day in and day out without employees. Let us hope that in the coming decade, those numbers will double, then triple and quadruple. For here is the most powerful engine of economic growth and sustenance. Here is our way back”

“If the next Google is to emerge and bring with it thousands of new jobs, it must first start over some kitchen table where not only hope but opportunity is readily available. Where entrepreneurs not only start businesses at a higher rate, but also survive and thrive at a higher rate.”

“Through much discussion, writing, and brainstorming on each topic, I arrived at one core thesis: Not just entrepreneurship, but bootstrapped entrepreneurship is the true weapon of mass reconstruction.”

“Businesses often fail to take flight because they cannot raise funding. Well, start with the assumption that funding will not be available until the business is substantially further along, if ever, and that bottleneck is removed.” Continue reading →

While we have been bailing out folks for awhile now, in the next few months as the Obama team and the powerful Dem Congress set and implement their agendas, expect more bailouts via tax cuts, mortgage adjustments, and spending on everything from bridges to “National Bee Museum” parking lots.

We offer up a nugget from Schumpeter’s 1934 work The Theory of Economic Development, in the hope that some policy makers will remember that creating new things (not preserving old ones) is at the core of sustainable growth that raises living standards. Here is J A Schumpeter explaining a core motive of entrepreneurs:

“there is the joy of creating, of getting things done of simply exercising one’s energy and ingenuity… Our type seeks out difficulties, changes in order, delights in ventures”

We hope that policy makers take this simple idea — that the creation of the new, not the protection of the old, is what keeps entrepreneurs and economies moving into the future. So spend if you will, but please find people and groups focused on facing challenges and creating new futures, not preserving ‘glorious’ pasts and avoiding more difficulties.